The Gender Pay Gap in Italy: Some Evidence on the Role of Decentralized Collective Bargaining

Abstract

This paper aims to contribute to the existing literature on Gender Pay Gap (GPG), by using data collected by ISTAT with the Structural Earnings Survey (SES) for 2002, 2006 and 2010. The analysis focuses on the source of this wage gap in 2010, pointing out the role of bonuses related to performance in shaping gender gap in earnings. The analysis is carried out in three steps. After having assessed the existence of GPG in the Italian labour market with a descriptive analysis, the contribution of individual characteristics and institutional features (including decentralized collective bargaining at enterprise level) are pointed out over time. The analysis proceeds by isolating the subset of employees receiving performance pay (PP) in order to assess the role of PP in the gender gap in earnings. The analysis ends by pointing out the contribution of individual, job and firm characteristics to the probability of receiving PP. Can decentralized collective bargaining be considered as an element to promote an equal distribution of wages? Is PP the component of wage that gives the highest return on human capital?